Markets, Games, and Lobbying

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Contemporary business ethics asks the question: what moral responsibilities do actors in a market economy have? Specifically, what obligations do corporate managers have? In this paper I consider a new method for answering these questions, Joseph Heath’s market failure model of business ethics. On this view, the market is a staged competition that is normatively justifiable through its tendency to promote Pareto efficiency. Since the market is justified by Pareto efficiency, competitive behaviour in the market should be constrained by a set of rules that is consistent with the pursuit of Pareto efficiency. Treating business as a competition is philosophically justified, I argue, both in the sense that it satisfies the conditions of a game, or at least a game­like activity, and in the sense that the deontic weakening that competition brings with it is justified in the market. I consider one case in more detail, to demonstrate the value of the approach. Within the business competition, I argue, lobbying is an impermissible, though conditionally excusable strategy. This is because lobbying routinely produces market failures, and indeed is often pursued precisely with that goal.